2004 (10) TMI 515 - AT - Customs

Summary

Issues:
- Stay application seeking waiver of pre-deposit of duty amount under Section 111(o) of the Customs Act.
- Validity of DEPB Scrips purchased from the market.
- Invocation of extended period for demand.
- Prima facie case in favor of the appellants.

Analysis:
The appellants filed a stay application seeking waiver of pre-deposit of a duty amount confirmed against them under Section 111(o) of the Customs Act. The appellants argued that they purchased the DEPB Scrips from the market in a bona fide manner and that the license was valid until 2002. However, the Tribunal found that there was no evidence to prove that the appellants made any inquiry about the genuineness of the scrip from the issuing authority. The original scrip was determined to be fake and forged, and the appellants purchased it at their own risk. The Tribunal held that a void ab initio document cannot pass on any valid right, and the appellants cannot seek shelter under the law in such a case.

The Tribunal also considered the argument that the extended period for demand could not be invoked. However, it was noted that only after an inquiry by Customs Authorities was the original scrip found to be forged. The Tribunal emphasized that the appellants should have acted as prudent individuals and made inquiries about the genuineness of the scrip before purchase. Referring to a similar case precedent, the Tribunal concluded that there was no prima facie case in favor of the appellants.

As a result of not finding a prima facie case in favor of the appellants, the Tribunal directed them to make a pre-deposit of the entire duty amount within eight weeks. Failure to comply would lead to the dismissal of the appeal under Section 129E of the Act without further reference. The case was scheduled for reporting compliance and further orders on a specified date.

In summary, the Tribunal denied the appellants' request for waiver of pre-deposit, citing the lack of evidence of due diligence in verifying the authenticity of the DEPB Scrips purchased from the market. The Tribunal emphasized the importance of acting prudently and making necessary inquiries before such transactions. The appellants were directed to make the required pre-deposit within a specified timeframe to avoid dismissal of their appeal.